High deductible, considering supplemental insurance

I have a high deductible ($5,000) health plan, and wonder if I should purchase a supplemental insurance.  I currently need procedures that cost $549 each. I have had two of them in the last month and a half and will need more in the future months.  I have to pay for them at the time of the procedure.   Could I get a supplemental insurance plan?  I am 57 years old and live in Colorado.

Watching the Dollars Go By

Dear Watching The Dollars Go By,

In the state of Colorado, insurers are allowed to ask you medical questions and to refuse to sell you insurance if you do not meet their standards.  Since you have a current and ongoing medical condition, I sincerely doubt that you could find an insurer to sell you a health plan.

If your plan qualifies as “high deductible” by the federal standards, then you are allowed to have a Health Savings Account (HSA).  Ask your insurer or your employer if the plan qualifies for an HSA.  This is a very specific question; and they should know the answer.  Even if your employer does not put money into the HSA for you, you can put tax-free money into the account and pay for your procedures.  If the plan does offer an HSA, they should have forms and everything else you need to open an account.  That would at least reduce your out-of-pocket cost for the deductible.

If you cannot have an HSA, then start tracking all of the money that you spend out of your pocket for medical care.  You might be able to deduct it from your taxes, if your medical expenses reach 7.5 percent of your adjusted gross income.  Starting in 2013, you will be able to deduct these expenses only if they reach 10 percent of your adjusted gross income.  See IRS Publication 502 for more information about what is a “medical” expense.  (Your family’s medical expenses count toward the 7.5 percent, so keep track of their bills too.)

When your health plan comes up for renewal, you might want to consider a lower deductible or a plan that would allow you to have an HSA.  If your medical condition will eventually disable you, then you should also consider applying for Social Security disability.  You can get information about this from the Social Security Disability website.  People who qualify as disabled receive Medicare and other health benefits.

Good luck!

Linda Riddell

About Linda Riddell

A published author and health policy analyst with 25 years’ experience, Linda Riddell's goal is to alleviate the widespread ailment of not knowing what your health plan can do for you.